CONSTRUCTION BACKLOG VS CAPACITY: WHEN BACKLOG EXCEEDS WHAT YOU CAN EXECUTE.
A large backlog is only an asset if the crew and equipment exist to build it on the schedule the contracts require. When backlog exceeds labor capacity, projects start late, crews get stretched across too many jobs at once, and billing milestones are late. When backlog exceeds equipment capacity, mobilizations get delayed, projects that were supposed to start billing in month two start billing in month four, and the overhead continues against delayed revenue. SPM builds the 24-month backlog revenue forecast and overlays it against crew deployment capacity and equipment availability, so contracts that create capacity conflicts get caught before signing, when the options are still resolve it or decline it.
Overbooking doesn't feel like a financial mistake while it's happening. It feels like a great year. The contracts are signed, the backlog report looks strong, and the bank and the surety both like what they see. The damage comes later, when three jobs want the same crew in the same week and two of them wait. Mobilization money already went out on all three. The billing that was supposed to cover it slides two months to the right, and the LOC covers the difference at interest nobody bid.
WHAT IT MEANS.
Labor capacity is the maximum productive labor hours your current crew can deliver in a period without overtime, which is crew size times productive hours per week times weeks in the period.
Capacity has two dimensions and they fail independently. Labor capacity is about hours, and equipment capacity is about machines committed elsewhere on the same dates. A contractor can pass one test and fail the other on the same contract, which is why both get checked before a signature rather than after a mobilization.
WHERE THE BACKLOG OUTRUNS THE COMPANY.
How many billable hours can your crew deliver?
Labor capacity is the maximum productive labor hours your current crew can deliver in a period without overtime: crew size times productive hours per week times weeks in the period. A 15-person crew at 40 productive hours per week for 12 weeks delivers 7,200 labor hours of capacity. If the backlog requires 9,000 labor hours inside that same 12-week window, the backlog exceeds labor capacity by 25%. The choices are to hire, subcontract the overflow, push start dates to spread the backlog more evenly, or decline the work causing the overflow. The worst choice is signing the contracts and finding the constraint when three projects are all demanding crew that doesn't exist.
Do you have the equipment to build the backlog?
Equipment heavy trades like civil, grading, concrete, and excavation face equipment capacity constraints that operate independently of labor capacity. A grading contractor with two excavators and a backlog that requires three simultaneous excavator deployments has an equipment capacity problem regardless of headcount. The choices are renting a third machine with the cost written into the estimate, delaying one project start so the deployments happen in sequence, or subcontracting the scope that exceeds capacity. The financial risk is a project that starts on time and then stays idle waiting on a machine committed somewhere else.
Revenue that can't be delivered on schedule opens a cash hole
Signing more work than can be built on schedule produces a specific cash flow problem: mobilization costs get incurred on schedule while billing milestones fall behind because the crew can't get there on time. A project that was supposed to start billing in month two starts billing in month four because the crew was finishing a prior commitment. The overhead continues for two months against delayed revenue and the LOC gets drawn to cover the difference. The work eventually gets done and the cash comes in, and the shortfall in between was avoidable with a capacity analysis before the contract was signed.
WHAT IT LOOKS LIKE IN DOLLARS.
A 15-person crew at 40 productive hours per week across a 12-week window is 7,200 labor hours. A backlog that needs 9,000 hours in that same window is over capacity by 25%. That 1,800 hour overage is the whole decision: it's either a hire, a subcontract, a schedule change, or a contract you don't sign. Done as a 20 minute calculation before signing, it costs nothing. Discovered in week six of a delayed mobilization, it costs a season.
THE ANALYSIS THAT PREVENTS OVERBOOKING, BEFORE THE CONTRACT IS SIGNED.
Which crew is where, by week. Then overlay the new contract requirements on top of it and ask one question: does the new project fit in the deployment schedule without displacing a crew that's already committed? If the answer takes more than a minute to work out, the schedule doesn't exist yet in usable form.
Required hours come from the new contract by phase and by timing. Available hours are current crew capacity minus the committed project requirements for the same period. If required exceeds available by more than 10%, settle how you're covering it before signing rather than after. Ten percent is the threshold because overtime and sequencing absorb that much and no more.
Required equipment by type and by week comes off the new project schedule. Available equipment by type and by week comes off the existing deployment. Any shortfall gets covered by rental, by subcontracting, or by a schedule adjustment, and whichever one you pick goes into the estimate as a cost rather than absorbed later as a surprise.
If the new project starts 4 weeks later than planned because of crew availability, what happens to the 13-week cash forecast? The overhead continues either way and the billing is delayed. The question to answer before signing is whether the LOC is big enough to cover that stretch, and the forecast gives you a number rather than an opinion.
Turning down work is never comfortable. Signing work that strains crew and equipment to the point of execution failure is worse, and it costs the GC relationship on top of the margin. The capacity analysis is about growing at the rate the current infrastructure supports and building crew and equipment ahead of the contracts that need them.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
| Last 12 months revenue | Monthly fee | One-time onboarding |
|---|---|---|
| Under $1M | $1,900 to $3,300 | $1,000 |
| $1M to $3.5M | $2,600 to $5,300 | $1,500 |
| $3.5M to $6.5M | $3,800 to $8,300 | $3,000 |
| $6.5M to $9.5M | $5,100 to $11,800 | $4,500 |
| $9.5M to $12.5M | $6,100 to $14,900 | $6,000 |
| $12.5M to $15.5M | $7,400 to $17,650 | $7,500 |
| $15.5M to $18.5M | $9,400 to $22,400 | $9,000 |
| $18.5M+ | Quoted individually | Quoted individually |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Range reflects the three tiers below. Which one you're in depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
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